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The 8 GB disk you are seeing is an EBS root volume mounted on /. That's the same no matter what instance type you use, which is why it still only shows 8GB. The 32GB of storage is ephemeral storage attached to the instance (not EBS). It's possible that it's not mounting automatically but it's certainly there.

Either way you will need to make whatever changes are required to point to this new storage, where ever you mount it in the filesystem. That can be by changing your configurations or creating symlinks from the old location to the new filesystem.

Awesome thanks for the answer! I didn't know that the listed disk space for instance types is actually ephemeral storage and not the EBS disk size. I'm surprised Amazon doesn't auto-mount the instance storage for you when creating your instances in the launch configuration.
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dsw88Jul 2 '14 at 22:19